Britain's HUGE Stack Of Foreign Debt

We have always focused on our own personal debt in this country. Things like credit cards, store cards and loans have always been measured and analyzed by the media and our Government. But an interesting feature on the BBC website this week shed some light on the foreign debt owed by Great Britain. Over the past few weeks we have all been privy to what countries like Greece, Italy, Ireland, Portugal, Spain and others owe to the rest of the world. But this analysis by the BBC of what we owe to the world, will raise your eyebrows.

According to the BBC the UK owes: (all in Euros)

US: 578.6bn
Germany: 379.3bn
Spain: 316.6bn
France: 209.9bn 
Japan: 122.7bn
Ireland: 113.5bn

All in all, the UK owes an eye watering 7.3 TRILLION Euros to various countries around the world! That works out to 117,580 Euros per person in this country! This country's GDP is a piddly 1.7 trillion euros. So our debt ratio to our GDP is a depressing 436%.

Given all the huge numbers above, the UK economy is still seen as relatively safe despite all our foreign debt.

Some more figures for you: (totals, in Euros)

The US owes 10.9tn
France owes 4.2tn, as does Germany
Spain and Italy both owe 2tn Euros each


You know we are living in extraordinary times when we start talking in trillions more and more often. You also know that due to these extreme numbers, how deadly it would be for any one of these countries to default on it's debts. Greece has practically defaulted on it's debts, but they were only a minute 400bn Euros in comparison. If someone like Italy, Spain or France, or even worse more than just one of those, were to default, then there could be serious contagion within the Eurozone, which would see it's collapse.


You can find the BBC's interactive graphic here.

Customers Who Don't Pay

It's one of the biggest pains in the backside that window companies have to suffer, customers who don't pay when you finish the job.


What is the best way to deal with them? In my experience it's always best to filter out those who you think are most likely to be problem customers. You can decide then if you want to deal with them or not. Of course when time's are as hard as these, turning any business down isn't an easy decision. But sometimes you have to think ahead and anticipate what possible problems these customers can cause and how much it could cost you to put the situation right.


Dealing with non-payers at the end of the job is sometimes a difficult one to judge. Do you threaten to take back the products, even if it means leaving holes in their property? Do you threaten court action (once reminder letters have been sent out of course)? Taking back products can often lead to confrontation, and can give the impression that your company is slightly heavy-handed. Though from a contractual point of view, companies are still well within their rights to take back what hasn't been paid for. More often than not, the threat of court action and constant reminder letters usually does the trick. Customers tend to see how long they can get away from paying, though they know at some point they will have to hand the money over.


I would also like to make the point that the company I work for has a policy where as soon as the work is finished, we expect payment straight away. No dragging feet for a few days or over the weekend. When the work is done, it's to be paid for. If the customer has any little niggles (though I'm glad to say we have great fitters who don't cause so many), then we get it sorted ASAP - which means the customer doesn't have an excuse not to pay promptly.


However, a lot of the time it is the fault of the company for customers not paying. Poor customer service, product quality, bad workmanship and lax after-sales care are the biggest causes of customers refusing to pay at the end of the job. If you expect prompt payment, don't give the customer an excuse not to pay.

Global Recession No 2?

I know this is going to sound like a negative post, but I don't think I can just skip over the subject as if it's not happening.


Worries about European and American debt has caused the financial markets to sell off their shares in a manner not seen since the financial crisis 3 years ago. Markets are spooked by the fear that governments won't be able to pay off their debts and that the measures they are taking to reduce their budget deficits aren't far reaching enough.


The biggest European risks at the moment are Spain and Italy. Today the ECB announced that they would start buying up Spanish and Italian debt to try to ease the worries in the markets, but all Asian markets closed sharply down, and at the time of writing the FTSE 100 is down 1.5%. Last week alone the FTSE lost over $262 billion - that's about the same as our whole budget deficit in sterling!


So what is the going to mean for the spending public? Well this crisis is different to the last one in the fact that governments are struggling with their debts and not the banks, so immediate liquidity problems shouldn't be a problem. However, if a country was to default on it's debts, banks with money locked into those government would then start to take hits. It's then when we could start to see banks coming under the strain again.


The big worry from our point of view is how much media coverage this story is getting. The big headlines and 24 hour analysis isn't going to inspire the public to go out and buy a house full of windows and doors. I know some of you are going to think I'm being hypocritical for writing this post, but as I've said before, this site gets nowhere near the coverage the news channels do, so won't really cause that much harm. 


There is a potential for this crisis to be as bad as the one in 2008. At the moment the markets are very volatile, full of knee-jerk reactions because of the potential unknowns. Those buying and selling just need to keep their heads. Over reactions could cause this situation to become unnecessarily worse, plunging the world into another recession.